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-----Original Message-----
From: George Hatton [mailto:[email protected]]
Sent: Thursday, May 22, 2003 8:20 PM
To: [email protected]
Subject: Re: FW: HBP - Home Buyers Plan -Answers
quoted from CCRABooklet RC4135(E) Rev.01
Importance: High
David Ingram said:
You cannot deduct the amount, if any, by which the total of your
contributions to an RRSP during the 89 day period just before
your withdrawal from that RRSP, is more than the fair market
value of that RRSP after your withdrawal". (I don't know what it
means either ) .
George Hatton (a Cartier Partners Mutual Fund Representative and
RRSP specialist) explains:
What it means is that you must have in your RRSP, after you make
the Home Buyers Plan withdrawal, an amount equal to the face
value of the contributions in the restricted period. Thus, if
the value of the investment fell in that period, ie you were
buying into a declining market, you cannot just leave the reduced
value of the restricted period investments in the plan and
satisfy the conditions of the HBP.
----- Original Message -----
From: [email protected]
To: CENTAPEDE
Sent: Thursday, May 22, 2003 9:28 AM
Subject: FW: HBP - Home Buyers Plan -Answers
quoted from CCRABooklet RC4135(E) Rev.01
Sent: Wednesday, May 21, 2003 6:39 PM
To: [email protected]
Subject: HBP
I have purchased my first condo 1 ½ yrs ago and now want to buy
a second condo and rent the first. I have never contributed to an
RRSP and now want to contribute and use the RRSP as a down
payment to purchase the condo which I will live in as a
principal residence. Is this a good idea? How long does the RRSP
have to be in exsistence before I can pull it out for the Home
Buyers Plan?
Thanks
G XXXXXX XXXXX
----------------------------------------------
david ingram replies:
To participate in the Canadian Home Buyers' Plan you have to be
a first time buyer. From your question, it appears that you are
living in the first condo now.
To quote from the government's own pamplhet RC4135
"You are not considered a first-time buyer if, at any time
during the period beginning Jan 1 of the fourth year before the
year of withdrawal and ending 31 days before your withdrawal, you
or your spouse or common-law partner owned a home that you
occupied as your personal residence.
Therefore if you want to buy a new home in 2003, neither you
nor your spouse can have occupied a building you or your spouse
owned during the period Jan 1, 1999 and ending 31 days before you
were to take the money out in 2003.
--------------------------------
However, if you were not occupying a building you own, the
second part of your question is as follows:
Basically, if you put money into the RRSP within 89 days of
your withdrawal, you might not be able to use it as a deduction.
As the booklet says: "You cannot deduct trhe amount, if any,
by which the total of your contributuions to an RRSP during the
89 day period just before your withdrawl from that RRSP, is more
than the fair market value of that RRSP after your withdrawal".
(I don't know what it means either. A good rule of thumb is to
arrange your affairs so that you make all contributions at least
90 days before you make your withdrawal.)
david ingram - [email protected]
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
(604) 913-9133 - (604) 913-9123 www.centa.com
Cell is (604) 657-8451 (10 AM to 10 PM seven days a week)
US / CANADA / MEXICO
Working Visa and Income Tax Specialists
Be ALERT, the world needs more "lerts"
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